16 THE EARLY YEARS AND THE 
and by December of that year many firms of importers were in 
trouble. For more than twelve months every means was sought 
to stay the tottering structure, but it was a forlorn hope. The 
year 1842 was one of acute financial distress. Property of all 
kinds became unsaleable, and many business houses of the best 
repute became insolvent. One merchant in every three found 
himself in this position, the failures averaging over fifty a 
month.! Nor were conditions any better in Melbourne. There 
was a complete glut owing to the volume of imports ; and many 
consignees were forced to sell goods for anything they would 
fetch, completely underselling the regular merchants in the 
process and demoralizing the whole business of the community. 
Produce and stock slumped in an amazing manner, and had to 
be sold at ruinous prices ; sheep brought sixpence a head, cattle 
seven shillings and sixpence, and well-bred horses three pounds. 
The outlook was very black for the pastoralists, who, as the 
mainstay of the community, found themselves at the end of a 
long drought with no possibility of raising funds to recuperate. 
Lethargy and stagnation fell upon industry and commerce in 
every state. 
The year 1843 opened with promise of easier conditions 
and a diminishing volume of failures. This was merely a lull 
before the storm broke afresh, and carried down the Bank of 
Australia as its first trophy in a fall that involved the largest 
merchants and landowners. The Bank of Sydney and the Bank 
of Port Phillip went the same way a little later, and every 
financial house in the community suffered severely. It is on 
record that the veteran Bank of New South Wales finished its 
worst day with sixpence in the till. 
Liquidation became a widespread trouble, if not an actual 
disaster.2 To enable the Bank of Australia to proceed to realiza- 
tion, a special Bill was passed empowering the creditors to 
dispose of the assets by lottery; and this was actually done, 
1 Sales at auction record the pressure for realization, viz.: 1839, £513,400; 1840, 
£1,246,700; 1841, £963,700; 1842, £686,100; 1843, £454,500. 
3 Vide Coghlan, op. cit., p- 488. ‘Judge Burton's Bill allowing voluntary bank- 
ruptcy and protecting a debtor who voluntarily surrendered his estate to creditors 
came into force on February 1, 1842. It led at once to the avowed bankruptcy of 
large numbers who had been insolvent for some time—most of little standing and 
for small amounts. . . . But before long many larger traders made up their mind to 
the inevitable, and . ... by December 30th, there were 600 failures, mostly farmers, 
graziers, merchants, and storekeepers.’